US Dollar Stores' 'Betrayal'... Abandoning $1 Sales Strategy Amid Supply Chain Collapse and Inflation Assault

Responding to Profit Decline Due to Soaring Logistics Costs with Price Increases
Concerns Over Impact on Low-Income Consumers

[Asia Economy New York=Correspondent Baek Jong-min] The advantage of the US '1 Dollar Shop' Dollar Tree is its low price. Customers with tight budgets often visit here because they can buy food and various industrial products for 1 dollar.

Recently, many empty spaces have appeared on the shelves of Dollar Tree stores. Products that were commonly seen in the past have disappeared and have not been restocked.

Most of the products sold here are made in China. A bottleneck in maritime logistics has triggered a red light for product supply. At the same time, maritime logistics costs have skyrocketed, making it difficult to maintain the 1 dollar price system.

Because the selling price is so low, logistics costs account for a large portion of the cost price. The Trump administration's increased tariffs on Chinese products also contributed to the cost burden.

Ultimately, Dollar Tree announced on the 29th (local time) that it will expand the 'Dollar Tree Plus' shelves, which charge prices above 1 dollar, to all stores. Through Dollar Tree Plus, Dollar Tree has been attempting to overcome the limitations of the 1 dollar shop by selling products priced at 3 dollars and 5 dollars.

Michael Witynski, CEO of Dollar Tree, said, "We acknowledge the need to adjust (prices) in the current economic environment," adding, "We are all witnessing rising costs in wages, transportation, and suppliers."

CNN reported that Wall Street investors pressured price increases as Dollar Tree's stock price fell due to logistics cost burdens. The effect was clear. On that day, Dollar Tree's stock price surged by 16%.

Dollar Tree's move is intertwined with concerns that supply chain issues will lead to price increases and eventually cause a slowdown in consumption. This is because the low-income customers who visit 1 dollar shops could become the biggest victims of inflation.

This content was produced with the assistance of AI translation services.